Champion Iron Limited (TSX: CIA) (ASX: CIA) (OTCQX: CIAFF) (“Champion” or the “Company”) announces that Nippon Steel Corporation (“Nippon”) and Sojitz Corporation (“Sojitz”, and collectively with Nippon the “Partners”), entered into a binding agreement with Champion to form a partnership (the “Partnership”) for the joint ownership and development of the Kamistiatusset Project (“Kami” or the “Project”).
The Partners will initially contribute $245 million for 49% of the interest in the Partnership and Champion may receive future payments based on the Project’s financial performance, if and when in operation (the “Transaction”). Should the Company and the Partners make a positive final investment decision (“FID”) election following the completion of a definitive feasibility study for the Project (the “DFS”), they will share development and construction costs of the Project in accordance with their respective ownership interests. Through the Transaction and future pro-rata contributions from the Partners, the Project will benefit from up to $490 million in contributions prior to Champion requiring additional capital funding for its pro-rata share of the Project.
Champion’s CEO, Mr. David Cataford, said, “We are excited to partner with global industry leaders, who share our long-term vision for Kami to produce high-purity iron ore, which was recently recognized as a critical mineral by the Newfoundland and Labrador, Québec and Canadian federal governments. Attracting such industry leaders highlights the rare quality of the Labrador Trough’s resources and the region’s proven ability in constructing and sustainably operating sizeable high-purity iron ore projects. The financial support and collaboration provided by the Partners mark an important milestone as we work on elements required to optimize the Project towards a potential FID. With the Partners’ successful history in the steel industry and Champion’s stewardship in operating projects in the region, Kami could stimulate significant economic growth in Labrador West and is an opportunity to contribute in the decarbonization of steelmaking globally. Additionally, a recent announcement detailing collaboration between local provinces to make significant investments in projects to provide renewable power access for decades in the region, highlights Kami’s potential as a sustainable project.”